Cotton downturn offers opportunities that can pay dividends in the future

Despite the projections for another downturn in cotton acres this year, there is “a message of optimism, of opportunities,” says Kater Hake, vice president of agricultural research for Cotton Incorporated.

“What we want to do is take advantage of this change,” he told members of the Southern Cotton Ginners Association at their annual meeting at Memphis.

“When this current downturn is over, you want to look back and say, ‘I'm glad I took the opportunity to rotate fields with corn and other crops to solve weed and disease problems,’ or ‘I'm glad I invested in my business to increase profitability,’ or ‘I'm glad I took advantage of this period to drive the quality and demand for my products to new levels, making them more valuable in the marketplace.”

One “real positive” for the Mid-South from the standpoint of producing quality fiber, Hake says, is the extensive investment growers have made in irrigation.

“That has become increasingly important in recent drought years, and its impact on fiber quality and yield stability is very dramatic.”

“In the three-year period, 2005-2007, the fiber quality of irrigated Mid-South cotton, in terms of length and strength, was even more stable than that in the irrigated West.”

The type of cotton in demand by overseas buyers now focuses on fiber that works best on ring spinning equipment, Hake says, and fiber length and strength are key qualities.

“It's really import that we give our customers the type of fiber they want. The export world is now consuming mostly fine count (40 percent to 45 percent) or coarse count cotton (35 percent to 40 percent), with very little demand for medium quality (10 percent to 20 percent, and steadily declining).

“Hundreds of millions of peasant farmers are coming out of poverty, wanting a better life, wanting to purchase better apparel and other agricultural products — representing opportunities for U.S. producers.

“The reductions in U.S. cotton acreage present a tremendous opportunity to put the absolute best products in our bales, to provide the highest quality product possible for our customers, who are largely in China.

“To that end, we're supporting the development of very high quality germplasm that's going into new transgenic cotton lines that have great yield potential and fiber quality that's through the roof.”

Eliminating gossypol in cotton seeds, which would allow expansion into poultry, swine, and fish feeds, as well as potential for human consumption, further adding further value to the product.

Researchers at Texas A&M University, with Cotton Incorporated funding, have used high tech procedures to develop cotton lines with as much as 98 percent reduction in gossypol in the seeds, while leaving it intact in the rest of the plant to provide protection against pests.

“Cotton seed can normally have as much as 10,000 parts per million of gossypol; in the new lines, they've got it down to 200 ppm. We have a way yet to go for FDA/regulatory approval, but this could open exciting new potential for cottonseed meal that could run as much as $1,000 per ton.”

The recent movement in cottonseed prices “has been phenomenal,” Hake says, “with some analysts predicting $400 a ton. Cotton Incorporated has had a very strong program of promoting cottonseed to dairies and we've seen a very nice increase in this use. The real question right now is how high prices will go in 2008 and how it will affect usage.”

Uses for gin waste, including production of briquets for a heat source. “There are two demonstration plants, one in Mississippi, another in Arkansas, looking at potential for turning a disposable waste problem into a cash generator.”

Using gin waste for hydromulch is “going like gangbusters,” Hake says. “It's an ideal material for holding soil on rights-of-way or other erosive areas — again taking a disposable material and turning it into a very profitable product. Over the next two or three years, we see a real opportunity for expansion with this product.”

A harvest initiative that is a major cooperative effort between growers, machinery manufacturers, universities, and USDA/ARS ginning labs.

“Sixteen scientists are working on this project, looking at a wide range of equipment labor-saving opportunities for growers in areas such as fuel usage; conventional 6-row harvesters, strippers, and other systems; and transportation and storage. The economic model will focus on a complete systems evaluation, from field to bale, including the impact of modules and covers on ginning rate.”

A two-year project looking at lint cleaners, evaluating samples from a dozen commercial gins, and using high-speed cameras to gain new insights into gin machinery operation and efficiency.

“It's an exciting time in terms of growers' ability to produce high quality cotton with the lowest input cost,” Hake says. “From 1997 through 2007, yield growth has averaged 31 pounds per year, far exceeding expectations based on germplasm (15 pounds) and historical data (8 pounds).”